Question

The organizations’ Controller has received a notice from the Canada Revenue Agency (CRA) advising that the organization will be changing from an Accelerated threshold 1 remitter to an Accelerated threshold 2 remitter effective with the first pay of the new year. The Controller has asked you to provide an explanation of why this change has occurred.

In addition, she wants to understand how this will impact the statutory remittance schedule. Using the Current Year calendar in the course material, provide specifics of when the remittances are due for the January and February bi-weekly payrolls starting with the first pay date of the new year which is Friday January 5th.

-This is the memo to the Controller - a corworcer

-Why did their remitter type change?

- What is a difference between the threshold 1 and threshold 2 remittance schedules?

- List the new remittance dates for the 4 pay periods ending:

--January 5

--January 19

-- February 2

--February 16

Answer 1

Memo

To- Controller

From-coworcer

Date-15^th August, 2018

Subject- Applicability of Accelerated Threshold 2 Remittance

As recently our corporation receive a notice from CRA advising for changing from Accelerated threshold 1 to threshold 2 remittance. So here we are briefing some of the major impact from such change and better clarity of the new method applicability.

Change in method of Payroll deduction remittances-

      Applicability of Accelerated Threshold 1 Remittance- If the person, as an employer had total average monthly withholding amount (AMWA) of $25000 to $99999.99 two calendar years ago. It also includes those with associated corporations and multiple payroll accounts.

Under this approach, Canadian Revenue Agency (CRA) needs to receive the deductions by the following dates-

• For Threshold 1 Accelerated Remitters, remittances for payroll processed within the first 15 days of the month are due on the 25th day of that same month.
• For payroll processed on the 16th day of the month to the end of that same month, remittances are due by the 10th day of the following month.

Applicability of Accelerated Threshold 2 Remittance- If the person, as an employer had total average monthly withholding amount (AMWA) of greater than $100000 two calendar years ago.

Under this approach, threshold remitter may remit the deductions every week i.e.4 times in a month but amounts deducted from remuneration paid at any time of the month are due to be received by your Canadian financial institution no later than the third working day (not including Saturdays, Sundays, or public holidays) after the end of the following periods:

• from the 1st through the 7th day of the month;
• from the 8th through the 14th day of the month;
• from the 15th through the 21st day of the month;
• From the 22nd through the last day of the month.

Therefore the corporation had remittance up to 99999.99 before, which subsequently changed to remittances above $100000 from last 2years due to which CRA sent notice to us for changing the remittance method.

Changes in statutory remittance schedule-

Under Threshold 1- Payroll dates      Remittance date

                                      Jan.5^th –            Due date of remittance 25^th Jan.

                                     Jan.19^th-            Due date of remittance- 10^th Feb.

                                      Feb. 2^nd-            Due date of remittance- 25^th Feb.

                                     Feb. 16^th-         Due date of remittance-10^th March

Under Threshold 2- Payroll dates       Remittance date

                                     Jan.5^th                 Due after 3 working days after 7^th Jan. i.e. by 10^th Jan.

                                     Jan.19^th               Due after 3 working days after 21^st Jan. i.e.by 24^th Jan.

                                     Feb.2^nd                Due after 3 working days after 7^th Feb. i.e. by 10^th Feb.

                                     Feb.16^th              Due after 3 working days after 21^st Feb. i.e. by 24^th Feb.

                                     (Assuming there is no Saturday, Sunday or public holiday in between)

The new remittance schedule as per Threshold 2 Remittance-

Under Threshold 2- Payroll dates       Remittance date

                                     Jan.5^th                 Due after 3 working days after 7^th Jan. i.e. by 10^th Jan.

                                     Jan.19^th               Due after 3 working days after 21^st Jan. i.e.by 24^th Jan.

                                     Feb.2^nd                Due after 3 working days after 7^th Feb. i.e. by 10^th Feb.

                                     Feb.16^th              Due after 3 working days after 21^st Feb. i.e. by 24^th Feb.

                                     (Assuming there is no Saturday, Sunday or public holiday in between)

Hope it help the members in their understanding of method. We will share the information on regular basis on it as and when required.

Best Wishes

Coworcer